(2.) The other is our local system under which the State endeavours to earn an annual revenue of 9 per cent. to cover interest, sinking fund, and depreciation, such percentage being calculated on the cost of the branch mains and without regard to the expense on the main construction works. Some concessions to the settlers on the Goldfields Water Scheme and its extensions are unavoidable. We take the financial position into account in the reductions we advocate. At the same time we recommend the South Australian attitude for the consideration of the Legislature. RECOMMENDATIONS.

(1.) That the rate for first-class land shall be 4d. per acres. That the rate for second-class land shall be 3d. per acre. That the rate for third-class land shall be 2d. per acre. That the present holding fee of £5, and the present meter rent of 10s. per annum, be maintained. Excess water to be calculated yearly. Rates and excess to be payable on the 31st March in each year.

(2.) That the above ratings shall apply equally to all holdings situated within one mile and a half from the principal main or from any extension thereof, and either abutting thereon or not more than ten chains distant at the nearest point. Also that the same ratings should be applied to all guarantee systems as they expire.

(3.) That 4d. per acre, plus £5 holding fee and meter rent 10s., be the maximum rate paid on any extension.

(4.) That the price of water be reduced 2s. 6d. per thousand gallons on all extensions with the proviso that the Department can only guarantee to supply in the proportion of 72,000 gallons per one thousand acres to farmers during the period of greatest demand, in the summer. The Department to specify that period in distinct terms.

(5.) Holdings containing not less than two-thirds of first-class land shall pay the full rate of 4d. per acres for the whole acreage.

(6.) To determine all questions of area or of classification, the existing classification of the Land Department shall be taken to be the basis of calculation.

(7.) The appointment of an Appeal Board of one or more members to deal with appeals from:▬

(a.) Settlers who, for good and sufficient reasons, have not sufficient land cleared to make the land reproductive. (b.) Settlers whose holdings contain a large proportion of land unfit for cultivation. (c.) Settlers who claim that they are entitled to compensation from the State on general terms by reason of special hardship, or because their land is more than twelve miles from a railway station or siding.

(8.) The Board, in dealing with such appeals and in making any concessions, shall specify whether such concessions are final or for a term of years, and if the latter for what term such concession shall apply.

(9.) All appeals shall be made by letter, in the first instance addressed to the Board, through the District Inspector of the Industries Assistance Board, who shall report on each case in forwarding the appeal. Any appeal which cannot be decided upon by correspondence shall be finally decided at an Appeal Session in the nearest country town. WATER SUPPLY IN OTHER DISTRICTS. We take this opportunity of further reporting:▬

(1.) As the State can only supply on a business basis Goldfields water to agricultural districts at a price which represents a loss to the State, we recommend that all settlers in future be encouraged and assisted in all ways possible to provide their own waer supplies, by wells, tanks, or dams.

(2.) We recommend that where State advances are required to provide a sufficient farm supply, the general policy should be to finance at least a two years' supply. The Government engineers estimate that in the case of tanks, a tank of two thousand to two thousand five hundred yards capacity, and not less than from twelve to fourteen feet deep would be required.

(3.) The State's principal security in making such advances is the efficiency of the work done, and we further recommend that before any such advances are made, plans showing the catchment and site, the testing of the site, and the design should be approved by a qualified authority at the cost of the borrower. Such approval would tend to minimise the costly mistakes which result where no proper supervision is exercised.

(4.) In the eleven and twelve inch rainfall belt we consider that tanks of the size specified in paragraph.

(2) are necessary to carry selectors through the seasons. The dams should be long and narrow, and should be covered where possible. In country with a heavier rainfall, smaller excavations would suffice, but they should not be less than twelve feet deep in all districts North of Wagin and East of the Great Southern Railway. Shallow tanks should not be financed under any circumstances.

(5.) In opening out any fresh agriculture areas for sale, we recommend that, prior to offering such land, a water supply should be provided by the State at intervals of six to eight miles (as far as may be practicable), either by securing good wells of water fit for human consumption, or by sinking in the eleven and twelve inch belt, tanks of not less than 3,000 cubic yards capacity and 15 feet in depth. We have the honour to be, Sir, Your obedient servants, J O GILES, chairman B L CLARKSON, HENRY H PAYNTER, F E VENN, Members DISSENT I dissent from the attached report and recommendations, as follows:▬ Paragraph 9, Clause (i): I am not in agreement with the recommendation when the investment of Loan Funds is in contemplation. In such cases, water should be a first charge, and territorial revenue a secondary consideration. Recommendations, Clauses 1 and 5: I hold that in reducing the price of water to 2s. 6d. per thousand gallons, the State is conceding all that is required, except in cases of poor country or special hardship. The great drawback hitherto is that settlers could not keep sheep with water at 6s. At 2s. 6d. per thousand, this advantage is removed. Every settler is now enabled to keep stock and provide himself with an ample household supply. I favour a rate of 4d. per acre for all holdings containing two-thirds in area of cultivable land. To facilitate calculation, first and second class land to be classed as cultivable. Non-cultivable land to be classed at lower rates, from 3d. for stony or lake-grazing country, down to as low as 1d. for poor sandplain. Recommendations, Clause 9: As Parliament has already made concessions to settlers under the recent amendment of the Lands Act, I hold that the Appeal Board should act conjointly for the Lands Department, the Goldfield Water Supply Department, the Industries Assistance Board, and the Agricultural Bank, in considering appeals from Goldfields cultural Bank, in considering appeals from Goldfields Water Supply Clients. Where it is found that reconstructive action is necessary, the Board could then adjust for all Departments concerned, writing off what might be necessary to meet the extreme cases, and debiting each Department with its fair proportion of such loss. Such procedure would prevent the overlapping of concessions, and be the fairest way of treating both the Departments and the settlers. It is questionable if any of the concessions which may be required should be debited to the Goldfields Water Supply Scheme, which has been an invaluable assistant▬at considerable cost to itself▬to the settlement policy of the Lands Department. J O GILES. Chairman By Authority: FRKD, WM SIMPSON, Government Printer, Perth